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Imprimis, On Line -- July, 1993
Imprimis, meaning "in the first place," is a free
monthly publication of Hillsdale College (circulation
435,000 worldwide). Hillsdale College is a liberal arts
institution known for its defense of free market
principles and Western culture and its nearly 150-year
refusal to accept federal funds. Imprimis publishes
lectures by such well-known figures as Ronald Reagan,
Jeane Kirkpatrick, Tom Wolfe, Charlton Heston, and many
more. Permission to reprint is hereby granted, provided
credit is given to Hillsdale College. Copyright 1992.
For more information on free print subscriptions or
back issues, call 1-800-437-2268, or 1-517-439-1524,
ext. 2319.
---------------------------------------------
"The Road to Freedom"
by George Roche
President, Hillsdale College
---------------------------------------------
Volume 22, Number 7
Hillsdale College, Hillsdale, Michigan 49242
July 1993
---------------------------------------------
Preview: In this issue of Imprimis, based on a lecture
delivered at the 20th annual Ludwig von Mises Lecture
Series in April 1993, Hillsdale College President
George Roche contrasts the brutal reality of communism
with its idealistic promises and false claims about
human nature. In so doing, he makes the moral case for
the free market and examines how all members of society
prosper when individuals are left to make their own
decisions. He concludes, "Free men know what tyrants
never learn, that the ultimate economic resource is the
mind and energy of a free person."
---------------------------------------------
Morality According to Karl Marx
The biggest story of our times is this: Communism is
dying. But perhaps the most striking feature of its
demise is that it is not accompanied by much of a
celebration of the triumph of capitalism in the West.
You would expect countless books, articles and
spokesmen proclaiming victory for the free market. You
would expect a massive intellectual defense and
explanation of capitalist ideas--and perhaps some
crowing about how much better they are. You also would
expect political leaders in the West to redouble their
efforts to expand liberty. True, there has been some of
each of these, but there has been no concerted effort
to claim victory.
The near-silence is ominous. It is as if we had
achieved great ends with evil means and ought to be
ashamed rather than exultant at our success. This
guilty feeling is itself a communist hangover. We
should be rid of it once and for all, or Marx will have
the last laugh. Moreover, we must seek to understand
the cause of the communist demise. Until we understand
the cause, we will not be able to heal the frightful
wounds communism leaves behind, and we will ourselves
remain in peril of repeating the same mistakes.
We do know that without a doubt the economic
performance of communism has been dismal everywhere it
has been tried. Communism simply cannot compete with
free markets. But it was not economic failure that
really killed communism in Eastern Europe or the former
Soviet Union or that is in the process of finishing it
off in Latin America and Asia. We would be greatly
mistaken if we assumed that people in closed societies
only want more consumer goods. Certainly they would
like more and better food, housing, clothes and
appliances--wouldn't we all? But it is not a yearning
for mere possessions that moves them. After all, they
have from the beginning endured economic disaster and
terrible privation.
Ultimately, the death of communism has been
brought about by its own spiritual failure. The triumph
of "capitalism" is equally a spiritual victory, but we
in the West have been slow to recognize it as such. I
put "capitalism" in quotation marks because it is a
Marxist coinage and a hate word. It is also bad
coinage--all systems are necessarily capitalist,
because they all have to allocate capital. But everyone
is pretty much agreed about its Marxist and principal
meaning: a free market system based on the ownership of
private property and the free exchange of goods. I am
happy to accept this meaning and insofar as I use the
term, that is what I mean by it.
When I say capitalist ideas are better, I mean
precisely in their spiritual dimension. Of course they
are more efficient; everybody knows that. It is hardly
worth saying. What few see, however, is their moral
goodness. We are still blinded by that awful bit of
Marxian theory called "the theory of surplus value"
that has for more than a century stood moral law on its
head. The theory long ago disappeared from formal
economics (even the communists found it an
embarrassment), but its false conclusion is still with
us. It is summarized by an economic encyclopedia (which
mentioned the "notoriety" Marx gave it) as follows:
"Profit is unpaid labor appropriated by capitalists as
a consequence of the institution of private property."
In other words, according to Marx, the capitalist
system alone causes poverty (by paying low wages),
unemployment and periodic depressions. Private property
is bad. Rent and interest are stolen from workers.
Capitalists are all greedy, grasping, mean and
exploitative. By extension, wealth is considered ill-
gotten and tainted (this has led many a rich person to
finance revolutionary causes out of guilt for earning
or inheriting wealth). We need only document real cases
of nasty capitalists and exploited workers (of which
there are, of course, many), ignoring everything else,
to make the case seem valid. But it is nonsense, and
the evidence against it, in both theory and fact, is
overwhelming.
Marx's theory is the perfect excuse for every
personal failure in the market. With it, you can blame
anything on the capitalist (your boss, your foreman,
society, the system). You didn't succeed because you
were being exploited and stolen from. It is human
nature to want to excuse one's own mistakes, and here
Marx offers absolution for any failing, free for the
asking. You don't even have to repent. But there is a
price: To believe it, you have to learn to hate. The
"bourgeoisie" is to the communist dictators what the
Jews were to Hitler: the hate object used to "unite the
people." Totalitarianism always requires a permanent
enemy, a group to hate. The hate object must be an
abstract class (individuals are too concrete and too
well known to each other), and it must be "evil." Once
a would-be dictator persuades you to hate this class,
you are his slave. He is in complete control. You even
stop thinking for yourself. It is only a short step
beyond this to justify or to take part in genocide--the
gulag or the Holocaust.
It is little remembered now, but Marx first
advertised his theories as more economically efficient.
They got nowhere. In fact, they were drubbed by
experience: Capitalism was booming and wages were
rising rapidly when in the mid-19th century he
published his predictions that workers would be reduced
to poverty. Only when they lost the argument about
efficiency did Marx and the communists turn to a moral
argument, saying that capitalism was unjust. Only then
did they prevail, for there was no rebuttal in moral
terms. The claims of capitalist evils have been the
whole strength of communism ever since and still
pollute such intellectual swamps as Beijing, Ethiopia
and a number of American college campuses.
Morality in Econ 101
But capitalism is not unjust, nor it is unnatural or
immoral; its structure and rules are as ethical as they
are efficient. It is communism, on the other hand, that
is unjust, unnatural and immoral, as is finally
becoming clear after the cruelest century in human
memory--a century when nearly 170 million people
sacrificed their lives, mainly on the altar of statism
and socialist or communist ideology. Whereas socialism
and communism appeal to hatred and envy, capitalism not
only appeals to our moral instinct to help others, but
harnesses our energies to that purpose and rewards most
those who do the most for humanity.
All of us, you see, live in a whirl of activity
that involves the transfer of goods and services. We
sell our labor and produce, or rent and invest our
capital, for money. With our money we buy food,
clothing, shelter and the niceties of life. And there
are only two ways goods can be transferred. The first
is one-sided and involuntary to one of the parties: One
party takes what the other has, without giving anything
of value for it. This is called stealing (or in some
cases, taxes). Obviously, in such a one-sided transfer,
the first party gains and the second party loses. It
may look like a break-even transaction, but it is not;
it reduces the value of the goods to both parties, and
is a net loss to the nation. It also directs future
behavior by both parties to less productive channels,
adding to the net loss.
The second kind of transfer is two-sided: Both
parties voluntarily agree to the exchange. Its key
feature is that it is freely chosen. This, and this
only, may be called an economic exchange; the word
exchange even implies mutual consent. When we see why
both parties agree, we have the key to the whole of
modern economic science. It is simply human nature.
Each of us is one of a kind, not only in mind and body,
but in our talents, wants and goals. We each have a
scale of values for what we want, how much we want it,
and what we will do to get it. Moreover, our wants and
goals change constantly: We want food when we are
hungry, not right after a meal. We each know what is
the best thing to do according to our particular needs
at a given moment, and we act on our self-knowledge;
nobody else knows, and nobody else can decide for us.
No two of us ever have quite the same scale of values
directing what we do.
You can easily see this theory in operation at a
well-stocked cafeteria: Rarely will two people choose
exactly the same meal. The differences between us are,
as the saying goes, what make horse races--and the
whole free market. We make different exchanges because
we value things differently. You exchange your dollar
for a loaf of bread because you value the bread more
than the dollar. The baker agrees to the exchange
because he values the bread less than the dollar. Such
is the nature of all exchanges in the market, no matter
how complicated they may seem in their details. It is
invariably a matter of people trading something they
value less for something they value more.
The principles we derive from this fact are so
important that they figuratively make the world go
round. First, both parties gain from the exchange. This
refutes the notion that there is only so much wealth to
go around and if somebody gets some of it, he has to
take it away from somebody else. What hogwash! Wealth
is constantly being produced and consumed. It is merely
distributed through the marketplace. The more of it
there is, the easier it gets for all of us to have
some: That is simple supply and demand.
Second, the goods or services freely exchanged
increase in value, because both parties value them more
highly. Or, you can say that they move from less to
more valuable usage through more efficient allocation.
Free exchanges are a constant process of moving goods,
capital, and labor to where they are most useful,
making us all richer in the bargain.
The third principle is incentive. When we make a
good exchange and are rewarded for it, we have a
greater motive to do it again. Reward for our effort
brings out our best in the marketplace. But when we are
cheated out of what we earn or own by crime or
confiscatory taxes, we lose interest in working so
hard. Every dollar taken away is a disincentive to
economic production.
But we don't necessarily abide by these principles
here in the U.S., and that ought to serve as a warning
to those in the postcommunist world who want to imitate
us. By mid-1992, federal, state and local governments
were consuming 45 percent of the national income. That
was before the election of President Clinton. Just
imagine how that figure is bound to go up in the next
four years. We are still a wealthy people, but no
nation can survive forever so great and systematic an
assault on its ability and incentive to produce. If our
moral sense no longer tells us this, our gift for
economics should. Every dollar we confiscate is
devalued. The so-called transfer makes it worth less to
both the taker and the taken. At the same time, every
confiscation is a disincentive to future production.
When our earnings are taken away, we have less reason
to earn, and we will do less tomorrow.
The worst part of the whole tax-thy-neighbor
system is that it is so addictive--it feeds on itself.
When so much of our money is taxed away, we feel
cheated and lose all our moral qualms about getting to
the trough ourselves, one way or another, to get it
back. That's only fair, isn't it? No, it isn't. All we
are doing is resorting to the same means that cheated
us in the first place and we are giving overweening
government its strongest hold on us.
A Brighter Road Ahead
There is a brighter road ahead, though, as evidenced by
the fall of communism in Eastern Europe and the former
Soviet Union. Against seemingly impossible odds,
country after country has thrown off its communist
yoke. In the Christmas season of 1989, we all watched a
very special celebration in Berlin, and we knew the
impossible dream had come true. East and West
Berliners, reunited after decades, hugged, laughed,
poured champagne, wept, and defiantly danced on that
monument to barbarity that had divided them, the Berlin
Wall. Uncounted millions wept and laughed with them,
and church bells rang the world over. Here, for all
humanity to see, was the symbolic reunion of long-
divided Europe and of the world, in freedom.
Here, too, all saw that communism was no longer a
potent idea contending for the minds and hearts of men.
It was just one more instrument of power, naked power
of men over men, such as we have seen countless times
before in history. Its last pretensions as an
idealistic moral philosophy collapsed as its borders
were broken. The crimes it had so long concealed were
laid bare; it lay in the destruction and reek of its
own works, economically exhausted and spiritually
destitute.
To the inquiring souls among the younger
generation, communism must seem like some evil,
forgotten sect whose incantations and chants were like
witch doctors shaking bones. (Whatever did they mean by
"dialectical materialism" or "the theory of surplus
value"?) Those of us who have been through more of the
struggle may find these events more like awakening in
surprise and immense relief as an awful nightmare ends.
In Prague, Warsaw, Budapest, and even in Moscow,
the celebration of the triumph of capitalism that has
been so conspicuously lacking in the West has been
loud, exuberant and unrestrained. Obviously, we take
our market economy too much for granted. It has been
more admired, and at times better understood, where it
was absent and where the brunt of a coercive system was
felt everyday. In fact, there was a poll taken among
ordinary Moscow citizens with this question: "Which
system do you think is superior to the other,
capitalism or socialism?" The response was: capitalism,
51 percent; socialism, 32 percent. I'm glad they didn't
poll Harvard.
In this vein, my favorite story is one about the
huge Institute of Marxism-Leninism in Czechoslovakia.
It was disbanded as soon as the communist rulers were
tossed out, except for its Department of Bourgeois
Economics, which had been set up to study our ideas in
order to use them against us. The staff in this
department had secretly become capitalists through
reading the works of Ludwig von Mises, F. A. von Hayek,
Milton Friedman and other defenders of the free market.
Said the new Czech finance minister, "The world is run
by human action, not by human design"--a plain
reference to Mises' masterwork, Human Action. (One of
Hillsdale College's proudest possessions is the
personal library of Ludwig von Mises, who left the
entire annotated collection of his beloved books to
Hillsdale College, which he described as "that
educational institution which most strongly represents
the free market ideas to which I have given my life.")
Events in the postcommunist world--and here I am
not even talking about political events or the violence
that has erupted in Bosnia, Azerbaijan, and elsewhere--
are still swirling and changing too rapidly to foresee
how they will end. It is not going to be easy for
citizens of the new republics to rebuild their
decimated economies or to learn the ways of
entrepreneurial capitalism after decades of
suppression. But they have three things going for them
that give great hope. First, they have their churches
back-- churches that were, in fact, highly instrumental
in the downfall of communist rule, by their teaching
and moral leadership. Second, they know at least the
theory of free markets--I think they could teach us a
thing or two--and they certainly have experience in how
not to run an economy. Third, in large measure, they
have their freedom back. Freedom is what makes
everything work. We don't know quite how, because we
can't predict what free men and women will do, but we
can be confident that they will find ways to make
things work.
Something else I've noticed that hasn't been
mentioned anywhere is how direct and blunt the new
leaders in Eastern Europe and Russia are. They talk as
if they had long been truth-starved, as indeed they
were, and use none of the evasions or nuances of
politicians. And they tell us incredible things. All
this time, they say, they were cheated. Communism was a
hoax. It wasted their hard labor. It left them with
nothing. Worse, it made war on their spirit and left
behind "a decayed moral environment," in the words of
Czech President Vaclav Havel.
Back in 1984, an East German girl, wise beyond her
years, sadly told a visitor from the West: "It doesn't
make any difference what we become when we grow up. We
will still always be treated like children." She was
saying, like Havel, that the very fulfillment of life
through adult responsibility and moral choice was
impossible under communist suppression. Others--God
bless the human spirit that can laugh even in the worst
of times--have said the same thing with jokes. Here is
the wry assessment of an East German on "the six
miracles of socialism":
∙ There is no unemployment, but no one works.
∙ No one works, but everyone gets paid.
∙ Everyone gets paid, but there is nothing to buy.
∙ No one can buy anything, but everyone owns
everything.
∙ Everyone owns everything, but no one is satisfied.
∙ No one is satisfied, but 99 percent of the people
voted for the system.
What Free Men Know
For nearly a century, the Left in this country has
claimed that socialism, whether represented by Soviet-
style communism or European-style socialism, is morally
superior to our market-based capitalist system. They
have criticized every aspect of America, all the while
chanting their chants and rattling their bones. They
have compared our "failures," real and imagined, with
their utopian pipe dreams.
Through the testimony of those forced to live
under communism and socialism, we know that the truth
is exactly the opposite of all the promises. In the
former Soviet Union, in the name of "equality" and
"economic justice," the party bosses gave themselves a
cut of the wealth one hundred to one thousand times
greater than that of the masses. They created a ruling
class, the nomenklatura, more autocratic and
exploitative than the tsars. In a system much like
apartheid, except far more virulent, they reserved for
themselves all the top jobs, the best education, the
best medical care, and up to 100 percent of the quality
goods sold in special stores that only they could
patronize.
So shamelessly did the nomenklatura bleed workers
that, by some of their own calculations, it was
estimated that 86.5 percent of the Soviet population
were dirt poor. Many did not have running water or
electricity. Only 11.2 percent of the population could
be called middle class. That left just 2.3 percent with
virtually all the power and privilege; and among these
was a "super-elite" of about 400,000 people who alone
had access to such luxuries as the system was able to
import. The promises were all frauds. "Power to the
people" turned out to be totalitarian power in the
hands of a tiny, highly privileged ruling class.
"Economic justice" turned out to be rank exploitation.
Recent years have been bad for the nomenklatura
and good for the people. The cause of freedom has
blossomed not only in Eastern Europe and Russia but
around the world. Today, for the first time in history,
a greater number of the world's people are free than
are not. Many more enjoy some limited freedoms, and
free nations outnumber the unfree.
Free men know what tyrants never learn, that the
ultimate economic resource is the mind and energy of a
free person. Only from a free mind comes the direction
of all productivity and the innovation that is
tomorrow's prosperity. It is said that we now live in
an information economy. This is true enough, but it is
not the whole picture. Add to it an unprecedented
mobility for the movement of economic resources--assets
as well as data. Thought and money can and do travel
almost anywhere in a split second, too fast for the
plodding state to catch up. It is this mobility and
versatility that gives individuals the upper hand at
last. There is no turning back.
The growing power of the global marketplace is
bringing this fact home everywhere. Its power has
exposed the weaknesses of socialism and communism and
has helped tear down the Iron Curtain. Its power is
fundamentally moral and as such deserves all the moral
support we can give it. The message of the
postcommunist newcomers to the marketplace is directed
toward every would-be tyrant: "We are not things to be
used by you, but free people with inalienable rights.
In the market, it does not matter how we came into the
world but what we make of ourselves. We join in
cooperative effort for the good of all. If you
interfere, you harm all people. If you oppress us, you
will lose all that we have to offer and become poor.
Throw away your chains and your barbed wire; they are
useless now."
Tomorrow's Agenda
As I said at the outset, communism is dying, but we
need no more than the unrepentant Left to remind us
that the war of ideas is not over. It may even grow
more intense. The rejection of communism leaves a
vacuum that other "isms" and ideologies will rush to
fill. Certainly among them will be milder forms of
socialism that build the power of the state. It is the
business of all who stand for individual rights in a
civilized order to refute these efforts and make our
own ideas heard. The answer to bad ideas is good ideas.
Let us never forget that the war of ideas is a real
war, with real casualties should we fail.
One cannot predict the politics and perils of
tomorrow exactly, but the enemies of the moral order
change little. We know them. We can in some measure
anticipate their assaults by their beliefs and goals
and plan our own strategy accordingly. The enemy, as
ever, will be the exploiters, the wielders of power and
privilege. They will take positions against the
traditional and the normal, against home and family,
against distinction between man and woman, against
human nature itself: positions which, on analysis, will
treat people as mere conveniences to somebody's plans,
not as individuals of infinite worth. Whatever they
seek, they will be armed with ideological formulas and
warped words. Above all, they will try to force their
schemes on us, using the power of government.
Such resort to government "solutions" always seems
to me a giveaway that something wrong or dishonest is
involved. In freedom, persuasion--not coercion--is the
way to get one's ideas across, and the only way.
Imposing them by law denies to others their liberty,
their dignity, their right to their own opinions. It
is, in fact, an act of contempt toward them and an act
of pride in oneself--a claim to know better than we
what is best for us. In the view of Nobel laureate F.
A. von Hayek, this is the "fatal conceit." In the
Judeo-Christian view, it is sin. Deep down, it implies
a false, secularist view of life that throughout this
century has been at war with Western, and especially
American, ideals. It is precisely the kind of thinking
that has collapsed due to hard experience in Eastern
Europe and Russia; but it is still rampant here. We
need not know the whys and wherefores of a given
statist scheme to realize that it serves bent thinking
and bad purposes. It will, of course, be made to sound
good, as if it were correcting injustice instead of
creating it, or helping the needy instead of making
them dependent and helpless. It will, of course, have
the support of all the familiar "opinion makers" in the
academy, the media and the Washington Beltway. But it
is going to cost us dearly, not only in taxes and
liberty but in moral values.
Certainly in the coming years we will have to deal
with liberalism, a set of once-noble ideas that sold
its soul to statism decades ago and now grows more
decadent every day. It remains strong, but as a reflex.
Tap any liberal with a rubber hammer, and an informed
person can predict where the knee will jerk. The reflex
the Left constantly encourages is: Uncle Sam is there
to do what individuals can't or won't accomplish on
their own. If we agree with this reflex, we forget the
basic facts of life. Government can't do anything for
us without first taking from us the means to do it.
Government's only tool is force, and force is usually
the worst possible tool to apply in social matters.
Neither must we forget that we ourselves, as free men
and women, are the doers, builders and producers.
Running to Uncle Sam with our problems only takes away
from our own freedom and resourcefulness.
We have, I'm afraid, lost our fear of big
government, and we had better regain it soon. America
is not immune to suffocation by an Old World-type
state, any more than Eastern Europe or Russia has been.
Our survival is at stake. We are seeing momentous
change around us, but cannot be sure where it will take
us. Will a springtime of liberty bloom into a full
summer of peace? Or will our hopes collapse before some
new peril? Surely it is up to us to create the right
tomorrow for our children by taking charge today. There
has never been a generation in the history of the world
that has had such an enormous opportunity to make a
clear choice and to have such a strong hand in
implementing that choice. We can play our part in
shaping the world now emerging, or we can stand aside
and be overrun. The other side is working against us.
We have to be better. We have to lead with the right
ideas.
Ideas, not armies, rule the world. We believed too
easily that tanks, barbed wire, secret police and
instruments of thought control and totalitarian power
were decisive and that slaves could never be free. The
events of the last several years have proved us wrong.
It was false belief, not barbed wire, that enslaved. In
the end, the wire was cut and the Iron Curtain broken
by simple human choice, not arms. Those who had been
trapped behind the barricades said, "Enough!" and were
freed.
---------------------------------------------
George Roche has served as president of Hillsdale
College since 1971. Firing Line, the MacNeil-Lehrer
News Hour, Today, Newsweek, Time, Reader's Digest and
the Wall Street Journal have chronicled his efforts to
keep the College free from federal intrusion. Formerly
the presidentially appointed chairman of the National
Council on Educational Research, the director of
seminars at the Foundation for Economic Education, a
professor of history at the Colorado School of Mines,
and a U.S. Marine, he is the author of ten books,
including five Conservative Book Club selections, among
them: America by the Throat: The Stranglehold of
Federal Bureaucracy, A World Without Heroes: The Modern
Tragedy, Going Home, and A Reason for Living. His most
recent book is One by One: Preserving Freedom and
Values in Heartland America.
###
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End of this issue of Imprimis, On Line; Information
about the electronic publisher, Applied Foresight,
Inc., is in the file, IMPR_BY.TXT
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